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Netflix Adopts Stockholder Rights Plan

Netflix (NASDAQ: NFLX) announced that its Board of Directors adopted a stockholder rights plan (the "Rights Plan" or "Plan") and declared a dividend distribution of one right ("Right") for each outstanding share of Netflix common stock.

The Rights Plan is intended to protect Netflix and its stockholders from efforts to obtain control of Netflix that the Board of Directors determines are not in the best interests of Netflix and its stockholders, and to enable all stockholders to realize the long-term value of their investment in Netflix. The Rights Plan is not intended to interfere with any merger, tender or exchange offer or other business combination approved by the Board of Directors.

Pursuant to the Plan, Netflix is issuing one Right for each current share of common stock outstanding at the close of business on November 2, 2012. Initially, these rights will not be exercisable and will trade with the shares of Netflix's common stock. If the Rights become exercisable, each Right will entitle stockholders to buy one one-thousandth of a share of a new series of participating preferred stock at an exercise price of $350 per Right.

The Rights will be exercisable only if a person or group acquires 10% (or 20% in the case of institutional investors filing on Schedule 13G, as described in the Rights Plan) or more of Netflix's common stock in a transaction not approved by Netflix's Board of Directors. If a person or group acquires 10% (or 20% in the case of 13G institutional investors) or more of Netflix's outstanding common stock, each Right will entitle its holder (other than such person or members of such group) to purchase, at the Right's exercise price (subject to adjustment as provided in the Plan), a number of shares of Netflix's common stock having a then-current market value of twice the exercise price.

In addition, if after a person or group acquires 10% (or 20% in the case of 13G institutional investors) or more of Netflix's outstanding common stock, Netflix merges into another company, an acquiring entity merges into Netflix or Netflix sells or transfers more than 50% of its assets, cash flow or earning power, then each Right will entitle the holder thereof to purchase, for the exercise price, a number of shares of common stock of the person engaging in the transaction having a then-current market value of twice the exercise price. The acquiring person will not be entitled to exercise these Rights.

Netflix's Board of Directors may redeem the Rights for $0.001 per Right at any time before an event that causes the Rights to become exercisable. The Rights will expire on November 2, 2015, unless the Rights have previously been redeemed by the Board of Directors.